Strategic Quality Planning 1 Prepared & customized by : Dr.Ali Zahrawi [email protected].

Chapter 4Chapter 4

Strategic Quality Planning

1

Prepared & customized by : Dr.Ali [email protected]

Chapter 4-- Strategic Quality Planning 2

Strategy Planning

• Strategic planning has two important dimensions.

• These are content and process.

• Strategic content answers the question of what is to be

contained in the strategic plan. Strategic content refers to

the variables, definitions, components, and concepts that

are included in the strategy.

• Strategic process consists of the steps used to develop the

strategy within an organization.


Strategy Content• Why is Quality Planning Important?

• Quality improvement is a planned

managerial activity.

• Quality improvement involves

– identifying potential improvements.

– prioritizing potential areas for

improvement.

– planning the implementation of projects

and improvements.

• Strategy Content Variables:

– Time

– Leadership,

– Generic strategies,

– Quality as a core competency.


The Importance of Time in Quality Improvement

• Two Important Aspects of Time• The time taken to achieve business

goals as a result of quality.• The speed at which companies improve.


The Importance of Time in Quality Improvement (Contd..)

• Real-life experience shows that time is a key variable in

improving quality.

• A review of many studies and writings suggests that time is

an important variable to consider when managing successful

quality improvement.

• Time is also an important component of strategy.

• Thus, strategic planning is important for continuous quality

improvement.


The Importance of Time in Quality Improvement (Contd..)

• One of the approaches that some managers use we will call the “management by dictate” model.

• Using management by dictate, we set numeric goals for the coming year.


Leadership For Quality

• Leadership– Leadership is the process by which a leader influences a group

to move toward the attainment of super-ordinate goals.

• Super-ordinate goals are those goals that pertain to

achieving a higher end that benefits not just the individual,

but the group.

• Leadership is about the sharing of power. This power takes

many forms.


Leadership For Quality (Contd..)Types of Power

Power of Expertise Reward PowerSometimes a leader has special knowledge (or is perceived to have special knowledge).

If a leader has rewards that he or she can bestow on subordinates in return for some desirable position, the leader has reward power.

Coercive PowerIf the leader has power to punish the follower for not following rules or guidelines, the leader has coercive power.

Referent PowerIf a leader is charismatic or charming and is followed because he or she is liked, then the leader has referent power.


Leadership For Quality (Contd..)Types of Power Leadership Dimensions

1. Trait dimensionLeadership characteristics tied to the personal “traits” of leaders (such as height and intelligence).

2. Leader skillsAttributes such as knowledge, communication, planning, and vision.

3. Leader behaviorThis approach discusses how leaders behave to identify specific leadership styles and the effects of leadership style on subordinate performance.

Legitimate Power

Legitimate power comes with the position.


Quality as Strategy

• Although quality can still win orders in some market, in many markets

quality has become an order qualifier.

• This means that high-quality production is an essential ingredient to

participation in the market.

• Quality is still an effective tool in successful exporting in the international

market.

• We discuss quality as a strategy from the perspective of generic strategies.

These generic strategies are cost, differentiation, and focus.


Quality as Strategy1. Costs of Quality– New definitions of cost are wide, considering the

summation of costs over the life of a product.– This includes service, maintenance, and operating

costs for products– There are two broad categories of costs:

a) costs due to poor quality and b) costs associated with improving quality.

– PAF Paradigm : is a quality cost strategy


Quality as Strategy(contd..)• PAF Paradigm– Prevention costs are those costs associated with

preventing defects and imperfections from occurring.– Prevention costs include costs such as training , quality

planning, process engineering, and other costs associated with assuring quality beforehand .

– Appraisal costs are associated with the direct costs of measuring quality.

– These can include a variety of activities such as lab testing, inspection, test equipment and materials, losses because of destructive tests, and costs associated with assessments for ISO 9000 or other awards.


Quality as Strategy(contd..)• PAF Paradigm (continued)– Failure costs are roughly categorized into two areas of costs.

• Internal failure costs are those associated with on-line

failure.

• External failure costs are associated with product failure

after the production process.

• This includes failure after the customer takes possession of

the products (see Table ).


Examples of Failure Cost


Quality as Strategy(contd..)

2. Differentiation Through Quality

–Differentiation is achieved by a competitor if

the customer perceives the product or service

to be unique in an important way

– It is increasingly difficult to differentiate

products based on quality alone.


Quality as Strategy(contd..)3. Quality Through Focus– Think of a product that is particularly regional or is marked to

a particular group.

– That limited region or group is the object of the focus strategy.

– Such a focus strategy can be very profitable.


Quality as Strategy(contd..)• Quality as a Core Competency– Communication, involvement, and a deep commitment to

working across organizational boundaries.

– It involves many levels of people and all functions.

– Core competencies do not diminish with use.

– Competencies are enhanced as they are applied and shared.

– Quality, in and of itself, is probably not a core competency.

– However, core competency is built on the foundation of a long-

term commitment to quality and continual process improvement.

Strategic Quality Planning 1 Prepared & customized by : Dr.Ali Zahrawi [email protected].

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